While the number of ordered ships decreases, the lower berth capacity per vessel
increases. Extensive refit programs are shorter and less costly but are changing the
vessel into an almost new ship.
The ocean cruise order book momentarily contains 22 ocean cruise vessels to be delivered until 2016, with an average of[ds_preview] five to six vessel deliveries per year. It has to be kept in mind that more orders for deliveries in 2015/2016 are still possible at this time.
Within the last decade an average of ten vessels was delivered per year. Consequently, the amount of delivered cruise vessels seems to be decreasing. Meanwhile, the average passenger capacity (lower berth) increased from around 2,200 passengers (pax) per vessel (2003–2012) to ca. 3,000 pax per vessel of the current order book. This contrary development illustrates the general trend of growing cruise ship size but a shrinking number of orders. However, not only large vessels are being built but also smaller cruise ships with a capacity for 250 to 900 passengers. After some years of almost absence (2004–2009) from the order book they now contribute to the average figures again. The existence of small as well as very large vessels represents the vast product diversity of the cruise industry.
The decrease in amount of orders may have different reasons. Commonly, it takes between three to five years from announcement of an order to delivery for an ocean cruise vessel. This depends on whether a complete new design is created or a sister ship to an already existing class is to be built.
Due to this building cycle, the impact of the economic crisis can be seen just now in the order book (see following page). In 2009, only one vessel was ordered opposed to seven orders in 2008. The order hesitation was still present in 2010 with four orders that year. After the cautious no-order time, orders in 2011 increased to eleven including delayed ones which were initially planned for 2009 and 2010. This order dent is now visible in 2013 as approximately 14,000 new beds will join the fleet, whereas the average over the last decade was over 20,000 beds p. a. Nonetheless, the orders for 2015 already reach the 20,000 beds border again.
Another reason for lower numbers of vessels on order may be the huge refitting programmes of the cruise lines. Approximately 20 % of all ocean cruise ships reach the age of 10–14 years in 2013. With increasing competition, new regulations in place or upcoming changes in regulations, new technologies for operations (e. g. propulsion) and for passenger entertainment (e. g. flat screens, iPads), normal repair cycles of wear and tear, changes in passenger preferences/expectations as well as the wish for greater ship efficiency and yield, cruise lines often overhaul their ships within this timeframe.
One common trend with cruise ship refits is the addition of cabins in order to increase the vessel’s earning power. Another trend is the redesign of restaurants, lounges and bars as well as spas to latest passenger demands. Some extensive refurbishments, such as the 155 mill. $ scheduled refit this year of »Carnival Destiny« as part of Carnival’s »Fun Ship 2.0« programme, almost change the vessel into a new ship – in this case even with a new name: »Carnival Sunshine«. This exemplarily extensive refurbishment will increase the passenger capacity by adding half a deck with 183 passenger cabins to the ship’s structure. Other extensive overhauls can include the addition of a new middle part to the ship or adding balconies to the ship’s structure.
Such extensive refits may take up to two or three months shipyard time. Wide-ranging refits without great changes to the superstructure last possibly two to five weeks. The duration of a dry dock refit is considerably shorter than building a new ship and less costly as well. Consequently, it is quite attractive for cruise lines to invest into refits and keep their fleet on an up-to-date base.
All major cruise lines have refit programmes in place. The above-mentioned »Fun Ship 2.0« programme of Carnival Cruise Lines, which was started in 2011, includes refurbishment of 15 vessels until 2015. It has a total value of ca. 500 mill. $. Holland America Line’s »Signature of Excellence« programme included the refit of its »Statendam«-class vessels and had a value of ca. 566 mill. $.
These developments show that cruising cannot be seen detached from world economy. On the one hand financial and economic crises influence the cruise business, on the other hand it is remarkable how quickly the industry seems to recover from recessions. Orders are already picking up and may reach pre-recession levels in 2015 or 2016 again. At the same time, Asian shipyards like Mitsubishi Heavy Industries enter the field of cruising. Therefore, manufacturer’s competition becomes fiercer between the global players.
Helge Grammerstorf, Miriam Lüthje
